What entities should be considered as Persons Professionally Arranging or Executing Transactions (PPAETs) for the obligation to prevent, detect and report market abuse or attempted market abuse under Article 92(1) of MiCA?

The question refers to the interpretation of the meaning of indirect holdings of other financial instruments (Article 13) for the purpose of aggregated notification (Article 13a).
National Competent Authorities request that the European Commission clarify the meaning of ‘indirect holding’ in the context of financial instruments other than shares (i.e., securities providing voting rights).
The TD explicitly specifies, under Article 10, the different cases of indirect holdings of voting rights that are subject to notification.
In the case of financial instruments not granting voting rights (Article 13 and its reference in Article 13a) there is, however, no explicit definition of those cases of indirect holdings; and no explicit link to Article 10.
National Competent Authorities have raised questions about the precise definition of indirect holdings in this context—specifically, whether a full “look‑through” approach must always be applied, or whether the limitation to the look‑through approach set out in paragraph 10(e) also applies to financial instruments. In particular, it is unclear whether financial instruments held by a third party in its own name but on behalf of the person or entity concerned—such as those described in paragraph 10(g)—should be excluded.

Is a prospectus required under Article 1(5)(ba) of the Prospectus Regulation (PR) for reverse acquisitions?

Unlike Article 1(6b) of the PR, which requires a prospectus for reverse acquisitions within the meaning of paragraph B19 of IFRS 3, Business Combinations, Article 1(5)(ba) of the PR does not explicitly address this issue.

In EMIR, a CCP is defined as a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer. EMIR defines clearing as the process of establishing positions, including the calculation of net obligations, and ensuring that financial instruments, cash, or both, are available to secure the exposures arising from those positions. The definition of a CCP, however, seems to be fulfilled also by entities that are not authorised as CCPs, e.g. by firms acting as prime brokers. Prime brokers typically interpose themselves between the counterparties on a matched principal trading (MPT) basis. When they do this for markets for which it is customary to margin positions, they determine a net position on the basis of which they ask margin from their counterparties. With these activities it could be argued that prime brokers fulfil the definition of a CCP under EMIR. Another example of this are investment firms that operate an OTF offering MPT for derivatives (explicitly allowed under Article 20(2) of MiFID II).

Questions:

1. Is an authorisation as a CCP pursuant to Article 14 of EMIR mandatory for any legal person established in the Union meeting the definition of a “CCP” and providing “clearing services” in respect of financial instruments, or is it limited to entities offering clearing in OTC derivatives subject to the EMIR clearing obligation and/or in exchange-traded financial instruments? In this regard, is the intent of the legal entity (to offer clearing services as a CCP) relevant?

2. Are there other constitutive elements (e.g. intent, type of clients (retail/wholesale), loss mutualisation, unilateral margin) of the definition of “CCP”, apart from the “interposition”, i.e. becoming the buyer to every seller and the seller to every buyer, element (Article 2, point (1) of EMIR)?

3. What constitutes a “clearing service” in this context; should it be understood as “clearing” just as defined in Article 2, point (3) of EMIR or are there additional constitutive elements to be taken into account?

4. As regards the “interposition” element, where an investment firm (e.g. an OTF operator) executes transactions via matched principal trading (e.g. in accordance with Article 4(1), point (38), of MiFID II), do such matched principal trading transactions qualify as “interposition” (by the investment firm) for the purpose of the definition of a “CCP” pursuant to Article 2, point (1), of EMIR? If so, how would an investment firm (e.g. an OTF operator) using matched principal trading for the execution of transactions differ from a CCP?

5. Do CCP clearing services need to be performed by a separate legal entity from other regulated functions (e.g. the investment firm function), or can one legal entity perform CCP clearing services together with other activities (not linked to clearing) such as investment firm services?

It is not clear whether a parent undertaking is required to aggregate an Entitlement to Acquire and/or Financial Instrument with Similar Economic Effect (collectively the “Article 13 Financial Instruments”) which its subsidiary undertaking holds indirectly. For instance, where a subsidiary owns share options having voting rights (i.e. an Article 13 Financial Instrument - article 13(1)(a)) in an issuer, but holds those share options through a trustee (therefore falling under article 10(g)), would the subsidiary’s ‘indirect’ control over the voting rights pursuant to the share options (registered in the name of the trustee) need to be aggregated by the parent?

The doubt arises because article 10 of the Transparency Directive which creates a list of cases where an indirect holding is said to arise cross-refers only to article 9 (i.e. to holdings of voting rights), and not to Article 13 Financial Instruments. Accordingly, there is doubt, whether the reference to “indirect” holdings of Article 13 Financial Instruments in article 13a(1) (regarding aggregation) should be interpreted with the plain English meaning of “indirect” which refers to a parent-sub relationship, or whether it should be extended to include all the forms of indirect ownership under article 10 of the Transparency Directive.